The National Bank is authorized to use the following resolution tools:

• Merger of a bank in resolution with another commercial bank, provided there is adequate commercial interest in the market and in view of maintaining financial stability as a result of the transaction;
  
  
• Disposal of shares, assets and/or liabilities of a commercial bank, which means full or partial transfer of the shares, assets and/or liabilities of the commercial bank in resolution to a buyer (except temporary bank);
  
  
• Transfer of shares, assets and/or liabilities of a commercial bank to a temporary bank - Bridge Bank, which means fully or partially transferring the bank's shares, assets and/or liabilities to a temporary bank in order to maintain the critical functions of a commercial bank under resolution. For this purpose, the Ministry of Finance of Georgia establishes a temporary bank with the intention of selling it under market conditions within a specified period. "Bridge Bank Playbook" was developed between the National Bank of Georgia and the Ministry of Finance of Georgia in connection with the mentioned instrument, which is a guideline in the process of implementing the said resolution instrument.
  
  
• Recapitalization of a commercial bank by issuing new shares, which gives the National Bank the authority to increase the supervisory capital of a commercial bank in resolution regime and to ensure its healthy functioning, to make a decision on the issuance of new shares by this bank and their sale;
  
  
• Recapitalization of a commercial bank by writing off or converting its liabilities (bail-in), which represents the authority of the National Bank to supplement the bank's supervisory capital by writing off or converting the liabilities of a commercial bank in resolution mode through reasonable financial restructuring. The write-off or conversion of liabilities is carried out in the opposite direction of the creditor hierarchy as defined by the Law of Georgia "On the Activities of Commercial Banks". In particular:
  
  
  • Initial losses are borne by the shareholders of the commercial bank (CET1) and only then additional primary capital (AT1) and secondary capital (Tier2) bear the loss;
  • Creditors receive losses in the reverse order of the fulfillment of established requirements during liquidation;
  • The law defines the principle that equal protection of the interests of creditors of the same rank of a commercial bank should be done. In addition, the shareholders and creditors of a commercial bank under resolution should not receive a more loss than they would receive in the case of liquidation of the commercial bank.

The resolution committee of the National Bank makes a decision on the resolution instrument, and the basis and conditions for using the resolution instrument are defined in its decision.